The first finding of the ITAB research was that a competitive investment climate has two basic components: • A competitive advantage related to location, people, resources or technology; and • A public sector legal and institutional framework that facilitates investment.
First Nations economies are not without potential. Most have a competitive advantage in location, human resources, innovative strengths, or access to natural resources. In those few cases where no competitive advantage exists on First Nation land, the possibility of settling outstanding land claims or adding land to existing reserves or integrating into markets in other jurisdictions provides hope. In other words, the research did not identify this as the barrier to First Nation prosperity. Moreover, to the extent that First Nations can translate their existing competitive advantages to markets outside First Nation communities, the potential for First Nation economic development is much higher.
The barrier to prosperity on First Nation land is an inability to provide the institutional and legal framework to support investment. As proof, the second major finding of the research was that the costs of doing business on the most advantaged First Nations lands was four to six times higher than it was off First Nation land. The costs of doing business are principally a function of an economy’s public sector mix of revenues and services, its economic and governance legal framework and institutions, and the economic infrastructure. The research found that these factors are uncompetitive or sub-standard for First Nations.
The third major finding of the research is an identification of the legal and institutional framework required to support investment on First Nation lands. All told, about 20 specific laws, agreements, governance responsibilities and changes to the fiscal relationship were identified.
Taken together, the research suggests that implementing this legal and institutional framework is the key to opening the door First Nation economic potential. A key element of this strategy is to provide First Nation administrators and other students with access to the information and systems necessary to implement an appropriate legal and institutional framework to improve the First Nation investment climate.
The ITAB research has significantly influenced public policy. In 2003, the Auditor General cited the ITAB research in her report on First Nation economic institutions. The ITAB recommendations were endorsed to create national institutions that fill the legal and administrative gaps preventing markets from working on First Nation lands. In 2007, the Senate released “Sharing Canada’s prosperity – A Hand up Not a Hand Out.” The Senate report cited the ITAB research and endorsed three long standing ITAB recommendations related to infrastructure, land title certainty and additions to reserve. Most notable is their recommendation that there be federal support for an institution like the Tulo Centre to transfer the knowledge to make markets work more effectively on First Nation lands.